King’s mature Candy Crush Saga continues to decline, dragging down gross bookings, while newer franchises aren’t growing fast enough to counteract this weakness.
Advertisement
When it comes to KING stock, though, its valuation is fairly cheap – price-to-earnings ratio is a mere 7 and King’s been cranking out some pretty juicy cash flows.
King stock was down 3% going into earnings. The company has been rated an average of 2.08 by 13 Wall Street Analysts.
Wal-Mart Stores Inc. recently traded at $72.26, a gain of $0.15 over Thursday’s closing price. As of this writing, King Digital shares are down 12.50% to $13.30 in mid-day trading. Bank of America set a $17.00 price objective on shares of King Digital Entertainment PLC and gave the company a “hold” rating in a research note on Friday, May 15th.
Analysts on average had expected the company to earn 43 cents per share on revenue of $490 million, according to Thomson Reuters I/B/E/S.
But beyond the player metrics, King’s share price is also taking a hit because the company says it only expects to generate “gross bookings” of $460 million to $485 million for the next quarter.
Nevertheless, this beat analysts’ expectations of $513 million.
RBC Capital Markets downgraded King Digital to sector perform from outperform, while J.P. Morgan cut its recommendation to neutral from overweight, according to a Briefing.com report. The company has a market cap of $4,894 million and the number of outstanding shares have been calculated to be 321,959,000 shares.
What’s really impressive about King Digital’s Candy Crush Saga is that it has remained a top grossing game on the App Store and Google Play for almost three years now.
In August, King Digital launched its first simulation game, Paradise Bay. Shares of KING have fallen 11% so far this year, while Zynga is up about half a percent.
At US$490mln revenue was down more than 15% compared to the same period of 2014, and second quarter profit fell to US$119mln from US$165mln previous year. While King has been churning out new games, Candy Crush Saga still represents a significant chunk of King’s business, accounting for almost 40% of gross bookings during the second quarter.
King Digital Entertainment plc is an interactive entertainment company for the mobile world.
Advertisement
King’s monthly active users also slid from 550 million in the first quarter to 501 million.
